Econ 515

The dancing machine industry is a duopoly. The both firms, Chuckie B Corp. and divisor Gene Dancing Machines, compete through Cournot amount-setting competition. The carry curve for the industry is P = degree Celsius Q, where Q is the total measuring produced by Chuckie B and Gene Gene. Currently, each firm has b putline cost of $40 and no fixed cost. Show that the setoff price is $60, with each firm producing 20 machines and earning wage of $400. Pc= deoxycytidine monophosphate (Qc + Qg), MCc= 40, Q= Qc + Qg Profit= TRc TCc = PcQc TCc = ( one C - Qc - Qg) Qc - 40 Qc = degree Celsius Qc Qc2 QgQc 40 Qc From Chuckie B Corps view and surmise Maximum winnings: 100 2Qc Qg 40 = 0 60 2Qc Qg = 0 Qc = 30 - .5Qg Pg= 100 (Qc + Qg) MCg= 10 Q= Qc + Qg Profit= TRg TCg = PgQg TCg = (100 - Qc - Qg) Qg - 40 Qg = 100 Qg Qg2 QgQc 40 Qg From Gene Gene Dancing Machines view and assumption Maximum profit: 100 2Qg Qc 40 = 0 60 2Qg Qc = 0 Qg = 30 - .5Qc When Qc = 30 - .5Qg and Qg = 30 - .5Qc Qc = 30 - .5Q2 = 30 - .5(30 - .5Qc) = 30 15 + 0.25Qc 0.75Qc = 15 Qc = 20 So by correspondence Qg = 20 Thus, counterpoise price P = 100 Q = 100 Qc Qg = 100 20 20 = $60 And at long last each firms profits: Profits C = (60*20)(40*20) = 1200800 = $400 So by symmetry Profits G = (60*20)(40*20) = 1200800 = $400 Consider a market with two horizontally differentiated firms, X and Y. Each has a continual bare(a) cost of $20. Demand functions are: Qx = 100 2Px + 1Py Qy = 100 2Py + 1Px auspicate the Bertrand equilibrium in prices in the market. ?x = Qx ( Px ATC) = (100 2Px + 1Py) * ( Px 20) = 100Px 2Px2 + PyPx 2000 + 40Px 20Py = cxlPx 2Px2 + PyPx 2000 20Py holding on Py M?= cxl + Py 4Px =0 4Px = one hundred forty + Py Px = 35 + 0.25Py Do the same process: ?y = Qy ( Py ATC) = (100 2Py + 1Px) * ( Py 20) = 100Py 2Py2 + PyPx 2000 + 40Py 20Px = 140Py2Py2 + PyPx200020Px ? holding on Py M?= 140 + Px 4Py =0 4Py = 1! 40 +...If you want to get a full essay, order it on our website: BestEssayCheap.com

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